Shore Capital has reiterated its 'buy' recommendation for AstraZeneca PLC (LSE:AZN) following the release of the company’s fourth-quarter results, following which it also reiterated its above-consensus £130 price target and updated its forecasts.
AZ’s Q4 and prelim figures flagged up a cut to contributions from Covid medicines but also provided guidance on the underlying business, which is expected to deliver double-digit growth supported by a broad blockbuster base.
In its research note, Shore flagged up the fact that AZ has outlined plans to initiate more than 30 new phase III trials in the year ahead, with a goal to get 15 new drugs approved before the end of the decade.
The pipeline prospects are considered "compelling", the broker added, particularly in oncology, and the pipeline could help AZ navigate its loss of exclusivity on certain products in the coming years.
In terms of upcoming catalysts, Shore reckons investors are eagerly awaiting phase III readouts for cancer drugs Dato and Enhertu.
Shore pointed out that the shares trade on a forward price multiple of 16 times, slightly ahead of the peer group average.
Its price target implies a forward P/E of 18 times, which the broker believes is justifiable given the earnings trajectory and conviction that AZ can sustain long-term growth.
In early trade, the shares were up 1.4% at £11.58.
Of the 25 banks and brokers following AZ, 19 are positive on the stock. The consensus price target is £127 a share.